Customer Service Representatives (CSRs) are employed by banks and other companies to handle inquiries by account holders regarding their accounts, and to contact account holders regarding market promotions, delinquent accounts and other programs. The CSRs may handle credit card accounts, mortgages, personal loan or other types of accounts.
When contacting delinquent account holders, for instance, CSRs are often directed to try to obtain a promise from the account holders to pay a certain amount of the balance due. Each CSR may be made responsible for a certain number of late, underpaid or otherwise delinquent or noncurrent accounts. For example, a CSR may be assigned a set of delinquent or other accounts, and may have inbound or outbound calls on those accounts distributed to them via an automated call engine while on shift. The amount that the account holders promise to pay may be determined by discussions between the account holder and the CSR servicing the account.
Large banks and other organizations may spend significant resources, sometimes millions of dollars per year, to staff and employ CSRs around the clock in such concerted service and collection efforts, at call centers, Web centers and other facilities. However, it is difficult to measure whether this deployment of CSRs is beneficial to the bank, or how productive the efforts of the call center or other CSR facility are in terms of improving account performance.
One known method of evaluating collection operations is to measure the percentage of promises to pay by delinquent account holders that are kept within a specified window of time. Another method is to measure the average size of payments which are fulfilled. A third method is to measure the percentage of promises kept per hour worked by CSRs.
However, these and other methods of evaluating CSRs and other personnel encourage those personnel to emphasize behaviors that may not be optimal to the bank or other institution. For instance, one incentive these conventional measurement schemes present to CSRs is to request promises for payment sizes that are smaller than what an account holder may be able to pay. Since an account holder is more likely to make good on a smaller payment, CSRs may tend to be satisfied with promises for smaller payments so that there is more likelihood that the payment will be made. Since the CSRs may receive bonuses or other awards based on the number or percentage of promises to pay that are kept or the number of payments kept per hour worked, regardless of amount, securing the smaller payments may be advantageous to the CSR.
Although a high percentage of promised payments made appears efficient, and may make the CSR appear productive, the total amount of the payments made or the payments made to each particular account may not be fully advantageous for the bank or other institution on an overall basis.
Even when this effect is somewhat taken into account by using a metric such as average payment size, one large up front payment could-raise the average for a given set of accounts handled by a CSR. Securing such a payment may induce the CSR to be satisfied with smaller payment promises or forbearance for the remaining balance on that account, or on other accounts for a measurement period when greater amounts could be secured.
There are moreover further account considerations not addressed by promise-kept or averaging techniques. If the amount of the payments made on account are generally small, such as, for example, a quarter or half of the amount that is owed on the balance for the last month, receiving the payment may not change the delinquency status of the account. That may not serve the goals of the bank or other institution.
Credit cards for instance are unsecured loans. Under financial regulations, if an account is delinquent for a certain number of months, a bank may no longer be able to record or list that account as an asset. Thus, receiving only a portion of one month's regular calculated payment may not be beneficial to a bank if, even after the payment, the account may remain delinquent by the same number or a greater number of months.
In the collections industry accounts may consequently be classified or staged, for delinquency purposes, in categories sometimes called “buckets”. Each bucket may represent the number of months that an account is delinquent. For example, the accounts in “Bucket 0” are not delinquent (current), the accounts in “Bucket 1” are one month delinquent, and so forth. Experience has shown that a majority of the accounts in Bucket 1 or Bucket 2 are likely to move back in to Bucket 0 within a relatively short time, and be restored to current status.
However, when an account moves beyond Bucket 2, the account is empirically less likely to move back to Bucket 0 and may be more likely to descend into lower levels of delinquency. Therefore, it is be beneficial to a bank or other entity to efficiently move accounts to lower numbered buckets, that is, to a better state of currency. The bank may then maintain the accounts as recordable assets.
For example, if a bank can not list an account that is over seven months delinquent as an asset, receiving a quarter or a half of a month's payment on such an account may not be enough to change the account's delinquency status. The account will thus progress past the maximum delinquency allowance, so that the bank may not be able to record that account as a receivable asset. At that stage some banks may send or sell the account to a separate collections facility, and the account may have to be written off for tax, regulatory or other purposes.
Thus, a partial payment received by the bank which does not move the account up to a less-delinquent status may not help the institution's bottom line, although it may make the CSR seem efficient and help the CSR earn a bonus or other incentive under promise-kept or other conventional schemes.
Although certain banks have tracked the aggregate movement of accounts through different levels of delinquency in the past, movement of accounts through buckets has not been used as a management tool at least at the level of CSRs or other employees. Thus, managers have not been able to assess the individual impact that CSRs, teams of CSRs or other units have on so-called roll rates (movement of accounts between buckets) and other aspects of financial performance. Other drawbacks exist.